The XJO continued to push higher Friday breaking the 6630 resistance, the XJO is breaking out of the Channel and is still showing bullish signals to around 6,750, the short term indicators are starting to look overbought. With the Futures down slightly we are likely to see a fairly flat day today. We suspect that we could see the market grind higher in the short term, but remain a little cautious as the current move higher is on hopes that a trade deal can be achieved; if any news around trade or interest rates disappoints market could fall strongly again.
US markets edge higher, The Dow closed 69.31 points higher (0.26%) and the S&P 500 was up 2.71 points (0.09%). Most other major markets also closed higher.
The S&P 500 stalled on Friday after a strong run that was triggered after China and the US confirmed they were getting back to the negotiation table. We saw some mixed economic data on Friday night, in Europe they saw a stronger than expected GDP reading and employment numbers. The US Non-farm payrolls were weaker than expected with the unemployment rate still sitting at 3.7%. FED Chair J Powell commented in a speech that the economy is still strong, with a good outlook, a strong labor market, and with inflation expected to go back above the 2% target. He also noted the headwinds could come from the uncertainty of Trade disputes and slowing global growth and they will watch how things develop and act as appropriate to sustain the current expansion. China on Sunday also released Import and Export data missing expectations on Exports, which slipped back into negative growth. Technically the S&P500 has stalled the 2,980 resistance, if it breaks the next target is the all-time high at 3,027. To the downside, support is at 2,978.
XJO Implied Volatility fell 5.07% and closed at 13.008%. The US volatility fell 6.52% and closed at 16.27%.
Crude was up again and is consolidating between $60US and $50US a barrel.
Gold has pulled back slightly after news of China and the US getting back to the negotiation table targeting support at $1,500.
Iron Ore seems to be struggling to stay above $90.00 US a tonne level.
The Aussie dollar pushed higher against the US and is back to about 68.50 cents.
The trade dispute has calmed for the moment putting the focus back on economic data and Central banks. This all seems very similar to June when markets were expected the US and China to come to a resolution after the G20 meeting. Both parties started to meet but Trump quickly escalated tariffs after negations failed. The trade war can seems to have been kicked into October, so now markets in the short term will likely focus on the FED on the 18th and any further economic data. The ECB is also set to announce on monetary policy Thursday night. The AUD is worth noting, as it has rallied strongly, if that continues we could see the Aussie market disconnect and hold back a little if the US continues to run higher.
ASX Update: Pro Medicus Ltd (PME) slumped -12.1%, following the news that Chief Executive Dr. Sam Hupert and Technology Director Anthony Hall are both looking to offload $36.1m worth of stock. Cooper Energy Ltd (COE)was up +6.0%, after the Company reported a new gas field discovery in Annie-1. Saracen Mineral Holdings (SAR) declined -5.1%, following a decline in price of the precious metal as trade optimism and firm U.S. data reduced demand for the safe haven.
Today’s trading: In China, data on money supply to be published. In Japan, trade balance and GDP data is anticipated